Guidelines on stress tests of deposit guarantee schemes

Status: Final and translated into the EU official languages

The proposed Guidelines will provide the methodological principles to assess whether the operational and funding capabilities of deposit guarantee schemes (DGSs) are sufficient to ensure deposit protection in the event of a bank failure. In line with the Deposit Guarantee Schemes Directive (DGSD), these Guidelines will promote the quality and the consistency of these stress tests. The resulting data will also facilitate future peer reviews by the EBA, contributing to a safe and sound EU framework for the benefit of depositors and financial stability.

The European Banking Authority (EBA) published today its final Guidelines on stress tests for deposit guarantee schemes (DGSs). The Guidelines provide a systematic methodology for planning, running and reporting on stress tests conducted by DGSs to assess their resilience to various types of scenarios in times of banking stress. In line with the Deposit Guarantee Schemes Directive (DGSD), these Guidelines will promote the quality and the consistency of these stress tests. The resulting data will also facilitate future peer reviews by the EBA, contributing to a safe and sound EU framework for the benefit of depositors and financial stability.

The Guidelines lay down basic methodological principles for all stress tests run by DGSs in the EU, including the various stages to be completed, the scenarios simulated and the areas and indicators to be measured. In addition, they establish a small core of harmonised priority tests to be run by DGSs and reported to the EBA with a view to running a comparable EU-wide peer review. The first stress test should take place by 3 July 2017.

With a view to contributing to the first EBA peer review foreseen in 2020, DGSs should test a broad range of operational and funding capabilities, which will cover key areas and main functions activated when a DGS intervenes. DGSs will be requested to report their results on these priority tests by 3 July 2019. The results should provide information for a first meaningful EU-wide overview of the resilience of DGSs.

Note to the editors

These own-initiative Guidelines have been developed according to Articles 16 and 26(2) of Regulation (EU) No 1093/2010 (EBA founding Regulation). They promote a common and consistent approach to DGS stress tests between DGSs throughout the Union, which must be performed pursuant to Article 4(10) of the DGSD, and contribute to the strengthening of the European system of national DGSs (Article 26(1) of the EBA founding Regulation).

Together with previously issued Guidelines on funding (risk-based contributions and payment commitments) and cooperation agreements, these Guidelines complement a significant effort, led by the EBA in the last two years, to provide DGSs with the technical support for a successful implementation of the new DGS Directive.